- MITI, during the 1960s-1980s, promoted the scrapping of existing industries once those industries encountered problems and building of new industries. What were the problems that led to curbing:
a. Light manufacturing in the 1950s and early 60s.
b. Heavy industry in the early 1970s
c. Machinery, auto, information equipment, etc. by the late 1980s. - What was the “high yen crisis”? How did Japanese firms respond? How did this contribute to de-industrialization in Japan beginning in the late 1980s?
- Hart-Landsberg writes that, because of the high yen crisis, wages were too low in yen terms, but too high in dollar terms. What does he mean by this?
- Many economists argued that the deep depression in Japan in the 1990s, caused by the bursting of the “bubble economy,” failed to respond to aggressively expansionary monetary policies because the economy was in a liquidity trap. But Koo argues that the real problem was a balance sheet recession. What’s the difference? What evidence does Koo give for this. What is a balance sheet recession?
- South Korea, in its rush to develop, emulated some Japanese planning practices and Japanese industrial organization. Explain.
- However, the treatment of workers in South Korea was entirely different from workers’ treatment in Japan. Explain.
- Korea in the 1980s and early 1990s became heavily dependent on technology transfers until Japanese firms began withholding technology from Korea. Why did the Japanese do this? How did this affect Korea’s markets?
- Because of its tremendous and early success in building of export industries, many economists have pointed to South Korea as an example of successful export-led growth. However, economist Alice Amsden and others argue that Korea was anything but a model of free markets and free trade. Discuss this.
The third arrow of Abenomics (structural reform) addresses three problems Japan faces – (a) a rapidly aging population and shrinking workforce, (b) falling or stagnant wages and increase in non-regular employment, (c) low economic status of women. Choose two or three policies Abe proposes to deal with each of these issues and briefly discuss them.
Sample Solution
